It seems like it's probably just a bunch of rectangles of various lengths gathered and sewn onto a length of ribbon to tie. I'm planning on making it out of a taffeta material. Has anyone made a skirt like this? Am I on the right track, or do you have any suggestions? Also- do I need a bustle pad or some gathered tulle to get it to stick out like that in the back and sides?

To get it to stick out you will need something under it for sure. Nothing will stick out that much without a support of some kind. A small bustle pillow, cage, or possibly even tulle like you said would work. As for exactly how it's made, not totally sure, but I would almost make the sections almost semi-circles and then stitch them all down to a single piece that you could line to hide your stitching seams, then add the waistband. But since I've never made one of these myself, I can't say exactly for sure how it should be done. That is just my two cents.